Poor decisions by Canadian patients cause up to $5.1 billion to be unnecessarily spent annually on prescription drugs, according to an Express Scripts Canada (ESC) study released this morning.
Most of that cost is borne by employers.
Even when an insurance company, such as Pacific Blue Cross, covers employees, it is the employer who generally pays the cost of the drugs because the employer pays the cost of the benefit plan plus an administration fee to the insurance company, ESC president Michael Biskey told Business in Vancouver.
B.C. patients pay, on average, $639 per year for prescription drugs. That's less than any other province in Canada, thanks to recent provincial government generic drug reforms that lessened the price of those medications. B.C. is also distinctive for its catastrophic drug coverage that reimburses patients who reach a certain threshold.
B.C. business owners, however, are much like counterparts across the country because they are paying through the nose for wasteful decisions that employees make.
For example, employees whose drug costs are fully covered have no incentive to select less expensive treatments, Biskey said.
He said business owners have a few options for how to reduce their employees' drug costs.
They include:
- selecting a health benefits management company to follow up with employees to ensure that they are adhering to drug treatment programs;
- offering financial incentives to employees by covering a higher percentage of the cost of lower-price drugs and a lesser percentage of the cost of higher-price drugs when the two drugs are equally effective; and
- issuing more information and education to employees about what their benefit plan covers.
Biskey prefers the first two options.
"One thing we know about education is that it generally doesn't work," he said.
That's because employees tend to blindly follow doctors' prescriptions and are often not inspired to learn about intricacies of their health benefit plan coverage, unless it could save them a significant amount of money.
"For example, I generally don't read the auto section of the newspaper,"
Biskey said. "Today I did because my wife wants to buy a car."
